Exhibit 1.2
CONTRIBUTION AGREEMENT
BY AND AMONG
SUPERIOR WELL SERVICES, INC.,
THE GENERAL PARTNER AND THE
LIMITED PARTNERS OF
SUPERIOR WELL SERVICES, LTD.
AND
THE GENERAL PARTNER AND THE
LIMITED PARTNERS OF
BRADFORD RESOURCES, LTD.
DATED AS OF MAY 3, 2005
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONTRIBUTION TRANSACTIONS
Section 2.1 Contribution of General Partner Interests to New GP............4
Section 2.2 Contribution of Partnership Interests to SWSI..................5
Section 2.3 Issuance of New Certificates...................................6
Section 2.4 Certificate Legends............................................6
Section 2.5 Fractional Shares..............................................6
Section 2.6 Certain Adjustments............................................6
ARTICLE III
CLOSING
Section 3.1 Time and Place.................................................6
Section 3.2 Deliveries at Closing..........................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SUPERIOR PARTNERS
Section 4.1 Organization and Qualification of Superior Ltd.................7
Section 4.2 Capitalization of Superior Ltd.................................7
Section 4.3 Authority, Authorization and Enforceability....................7
Section 4.4 No Violation...................................................8
Section 4.5 Title to Assets................................................8
Section 4.6 Litigation.....................................................9
Section 4.7 Bankruptcy.....................................................9
Section 4.8 Brokerage Fees and Commissions.................................9
Section 4.9 No Distribution................................................9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BRADFORD PARTNERS
Section 5.1 Organization and Qualification of Bradford Ltd.................9
Section 5.2 Capitalization of Bradford Ltd................................10
Section 5.3 Authority, Authorization and Enforceability...................10
Section 5.4 No Violation..................................................11
Section 5.5 Title to Assets...............................................11
Section 5.6 Litigation....................................................11
Section 5.7 Bankruptcy....................................................11
Section 5.8 Brokerage Fees and Commissions................................11
Section 5.9 No Distribution...............................................12
i
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SWSI
Section 6.1 Organization of SWSI..........................................12
Section 6.2 Capitalization................................................12
Section 6.3 Authority, Authorization and Enforceability...................12
Section 6.4 No Violation..................................................13
Section 6.5 Litigation....................................................13
ARTICLE VII
REPRESENTATIONS AND WARRANTIES CONCERNING NEW GP
Section 7.1 Organization of New GP........................................13
Section 7.2 Capitalization of New GP......................................13
ARTICLE VIII
COVENANTS
Section 8.1 Ordinary Course of Business...................................14
Section 8.2 Restricted Activities and Transactions........................14
Section 8.3 HSR and Other Regulatory Matters..............................15
Section 8.4 Commercially Reasonable Efforts...............................16
Section 8.5 New SWSI Charter and Bylaws...................................16
Section 8.6 Officers and Directors........................................16
Section 8.7 Access to Information.........................................16
Section 8.8 Section 351 Reporting.........................................16
Section 8.9 SWSI Registration Statement...................................17
Section 8.10 Blue Sky.....................................................17
Section 8.11 Notification of Certain Matters..............................17
Section 8.12 Further Assurances...........................................17
ARTICLE IX
CONDITIONS
Section 9.1 Conditions to Obligations of Each Party.......................17
ARTICLE X
TERMINATION
Section 10.1 Termination..................................................19
Section 10.2 Effect of Termination........................................19
Section 10.3 Fees and Expenses............................................20
ii
ARTICLE XI
MISCELLANEOUS
Section 11.1 Waiver and Amendment.........................................20
Section 11.2 Nonsurvival of Representations and Warranties................20
Section 11.3 Assignment...................................................20
Section 11.4 Notices......................................................20
Section 11.5 Governing Law................................................21
Section 11.6 Severability.................................................22
Section 11.7 Counterparts.................................................22
Section 11.8 Headings.....................................................22
Section 11.9 Enforcement of the Agreement.................................22
Section 11.10 Entire Agreement; Third Party Beneficiaries.................22
Section 11.11 Certain Assignments.........................................22
iii
CONTRIBUTION AGREEMENT
This Contribution Agreement, dated as of May 3, 2005 (this "Contribution
Agreement"), is by and among Superior Well Services, Inc., a Delaware
corporation ("SWSI"), Buffalo Valley Real Estate Company, a Pennsylvania
corporation ("Superior GP"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual and resident of
▇▇▇▇▇▇▇▇▇ County, Pennsylvania ("▇▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
and resident of ▇▇▇▇▇▇▇▇▇ County, Pennsylvania ("▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇,
an individual and resident of ▇▇▇▇▇▇▇▇▇ County, Pennsylvania ("▇▇▇▇ ▇▇▇▇▇▇"),
the ▇.▇. ▇▇▇▇▇▇, ▇▇. Grantor Retained Annuity Trust Dated November 1, 2004, a
Pennsylvania trust ("▇▇▇▇▇▇ Trust"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual and
resident of ▇▇▇▇▇▇▇▇▇ County, Pennsylvania ("▇▇▇▇▇▇ ▇▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
an individual and resident of ▇▇▇▇▇▇▇▇▇ County, Pennsylvania ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇"),
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual and resident of Indiana County, Pennsylvania
("▇▇▇▇▇▇▇"), Rhys ▇. ▇▇▇▇▇, an individual and resident of Allegheny County,
Pennsylvania ("▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, an individual and resident of Trumbull
County, Ohio ("Linaberger") (▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
Trust, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ and Linaberger being
referred to herein collectively as the "Superior Limited Partners" and together
with Superior GP, the "Superior Partners"), Eastern Material Corp., a
Pennsylvania corporation ("▇▇▇▇▇▇▇▇ ▇▇"), Allegheny Mineral Corp., a
Pennsylvania corporation ("Allegheny"), ▇▇▇▇▇▇▇▇▇ Cement & Supply Corp., a
Pennsylvania corporation ("▇▇▇▇▇▇▇▇▇") and Glacial Sand & Gravel Co., a
Pennsylvania corporation ("Glacial") (Allegheny, ▇▇▇▇▇▇▇▇▇ and Glacial being
referred to herein collectively as the "Bradford Limited Partners" and together
with ▇▇▇▇▇▇▇▇ ▇▇, the "▇▇▇▇▇▇▇▇ Partners").
W I T N E S S E T H:
WHEREAS, the Superior Partners currently own all of the outstanding
partnership interests of Superior Well Services, Ltd., a Pennsylvania limited
partnership ("Superior Ltd.") and the Bradford Partners currently own all of
the outstanding partnership interests of Bradford Resources, Ltd., a
Pennsylvania limited partnership ("Bradford Ltd.");
WHEREAS, Superior GP and ▇▇▇▇▇▇▇▇ ▇▇ own all of the outstanding limited
liability company interests in Superior GP, L.L.C., a Delaware limited liability
company ("New GP");
WHEREAS, ▇▇▇▇ ▇▇▇▇▇▇ currently owns 666 shares of SWSI Common Stock and
▇▇▇▇▇▇▇ currently owns 334 shares of SWSI Common Stock;
WHEREAS, the Superior Partners and the Bradford Partners wish to effect
a business combination whereby each of Superior Ltd. and Bradford Ltd. become
indirect wholly owned subsidiaries of SWSI; and
WHEREAS, pursuant to such business combination (i) Superior GP will
contribute its general partner interest in Superior Ltd. to New GP; (ii) the
Superior Limited Partners will contribute their limited partner interests in
Superior Ltd. and Superior GP will contribute its limited liability company
interest in New GP to SWSI in exchange for shares of common stock of SWSI; (iii)
▇▇▇▇▇▇▇▇ ▇▇ will contribute its general partner interest in Bradford Ltd. to New
GP; and (iv) the Bradford Limited Partners will contribute their limited partner
interests in
1
Bradford Ltd. and ▇▇▇▇▇▇▇▇ ▇▇ will contribute its limited liability company
interests in New GP to SWSI in exchange for shares of common stock of SWSI.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The terms set forth below in this Article I shall have the meanings
ascribed to them below or in the part of this Contribution Agreement referred to
below:
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of
the general rules and regulations under the Securities Exchange Act of 1934, as
in effect on the date of this Contribution Agreement.
"Board" means the board of directors of SWSI.
"▇▇▇▇▇▇▇▇ ▇▇" has the meaning set forth in the introductory paragraph
hereto.
"Bradford Limited Partners" has the meaning set forth in the introductory
paragraph hereto.
"Bradford Ltd." has the meaning set forth in the introductory paragraph
hereto.
"Bradford Partners" has the meaning set forth in the introductory
paragraph hereto.
"Bradford Partnership Agreement" means the agreement of limited
partnership of Bradford Ltd., dated as of May 1, 1997, as amended.
"Business Day" means any day other than a Saturday, a Sunday or any other
day when banks are not open for business generally in the Commonwealth of
Pennsylvania.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contribution Agreement" has the meaning set forth in the introductory
paragraph hereto.
"Commission" means the U.S. Securities and Exchange Commission.
"Delaware LLC Act" means the Limited Liability Company Act of the State of
Delaware, as amended.
"DGCL" means the General Corporation Law of the State of Delaware, as
amended.
2
"Effective Time" means immediately prior to the closing under the
Underwriting Agreement.
"Governmental Authorities" means the federal, state, county, city and
political subdivisions in which any property of SWSI, Superior Ltd. or Bradford
Ltd., respectively, is located or which exercises jurisdiction over any such
property or entity, and any agency, department, commission, board, bureau or
instrumentality of any of them which exercises jurisdiction over any such
property or entity.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Lien" means a lien, mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, easement, preference, priority, assessment,
security interest, lease, sublease, charge, claim, adverse claim, levy, interest
of other Persons or other encumbrance of any kind.
"New GP" has the meaning set forth in the recitals hereto.
"New GP LLC Agreement" means the limited liability company agreement of
New GP, dated as of March 2, 2005.
"New SWSI Bylaws" means the Amended and Restated Bylaws of SWSI in such
form as shall be approved by the Board prior to the Closing.
"New SWSI Charter" means the Amended and Restated Certificate of
Incorporation of SWSI in such form as shall be approved by the Board prior to
the Closing.
"Pennsylvania LP Act" means the Pennsylvania Revised Uniform Limited
Partnership Act, as amended.
"Permitted Liens" means Liens (including mechanics', workers', repairers',
materialmens', warehousemens', landlord's and other similar Liens) arising in
the ordinary course of business as would not individually or in the aggregate
materially adversely affect the value of, or materially adversely interfere with
the use of, the property subject to them.
"Person" means an individual, corporation, partnership (limited or
general), limited liability company, trust, joint stock company, Governmental
Authority, unincorporated association or other legal entity.
"Pricing Committee" means the committee designated or appointed by the
Board for the purpose of approving the pricing and terms of the initial public
offering of the SWSI Common Stock, or, if no such committee is appointed, the
Board.
"Registration Rights Agreement" means the registration rights agreement
providing for the registration under the Securities Act of the shares of SWSI
Common Stock to be received by the Superior Partners and the Bradford Partners
pursuant to this Agreement in such form as shall be approved by the Board prior
to the Closing.
3
"Securities Act" means the Securities Act of 1933, as amended.
"Superior GP" has the meaning set forth in the introductory paragraph
hereto.
"Superior Limited Partners" has the meaning set forth in the introductory
paragraph hereto.
"Superior Ltd." has the meaning set forth in the introductory paragraph
hereto.
"Superior Partners" has the meaning set forth in the introductory
paragraph hereto.
"Superior Partnership Agreement" means the agreement of limited
partnership of Superior Ltd., dated as of June 5, 1997, as amended.
"SWSI Common Stock" means the common stock of SWSI, par value $.01 per
share.
"SWSI Initial Public Offering" means the initial public offering of the
SWSI Common Stock contemplated by the SWSI Registration Statement.
"SWSI Material Adverse Effect" means a material adverse effect on the
combined business, operations, prospects, properties (including intangible
properties), assets, operating results or condition (financial or otherwise),
liabilities or reserves of SWSI, New GP, Superior Ltd. and Bradford Ltd., taken
as a whole; provided, however, that a general decline in the business or
prospects of the oilfield services industry as a whole shall not be deemed to be
an SWSI Material Adverse Effect.
"SWSI Registration Statement" means the Registration Statement on Form S-1
relating to the SWSI Common Stock to be filed with the Commission by SWSI in
accordance with Section 8.7, and any amendments thereto.
"Underwriting Agreement" has the meaning set forth in Section 9.1(d).
ARTICLE II
CONTRIBUTION TRANSACTIONS
SECTION 2.1 CONTRIBUTION OF GENERAL PARTNER INTERESTS TO NEW GP.
Immediately prior to the Effective Time:
(a) Superior GP will contribute its 1.0% general partner interest in
Superior Ltd. to New GP; and
(b) ▇▇▇▇▇▇▇▇ ▇▇ will contribute its 1.0% general partner interest in
Bradford Ltd. to New GP.
4
SECTION 2.2 CONTRIBUTION OF PARTNERSHIP INTERESTS TO SWSI. Subject to
Section 2.6, immediately prior to the Effective Time:
(a) Superior GP shall contribute its 85% limited liability company
interest in New GP to SWSI in exchange for 121,759 shares of SWSI Common Stock
representing 0.85% of the total outstanding shares of SWSI Common Stock to be
issued pursuant to this Section 2.2;
(b) ▇▇▇▇▇▇▇▇ ▇▇ shall contribute its 15% limited liability company
interest in New GP to SWSI in exchange for 21,487 shares of SWSI Common Stock
representing 0.15% of the total outstanding shares of SWSI Common Stock to be
issued pursuant to this Section 2.2; and
(c) each Superior Limited Partner and Bradford Limited Partner will
contribute its limited partner interest in Superior Ltd. or Bradford Ltd.,
respectively, to SWSI in exchange for the number of shares of SWSI Common Stock
set forth opposite such Person's name in the tables below:
LIMITED
PARTNER SHARES OF SWSI PERCENTAGE OF
INTEREST TO COMMON STOCK TOTAL OUTSTANDING
BE TO BE RECEIVED SWSI SHARES AT
NAME OF SUPERIOR CONTRIBUTED AT EFFECTIVE EFFECTIVE TIME
LIMITED PARTNER TO SWSI TIME
▇▇▇▇▇▇ ▇▇▇▇▇▇ 9.66% 1,176,196 8.21%
▇▇▇▇▇ ▇▇▇▇▇▇ 9.67% 1,177,413 8.22%
▇▇▇▇ ▇▇▇▇▇▇ 9.67% 1,176,747 8.22%
▇▇▇▇▇▇ Trust 10.00% 1,217,594 8.50%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 10.00% 1,217,594 8.50%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10.00% 1,217,594 8.50%
▇▇▇▇▇▇▇ 13.33% 1,623,100 11.33%
▇▇▇▇▇ 13.33% 1,623,434 11.33%
Linaberger 13.34% 1,623,435 11.34%
LIMITED
PARTNER SHARES OF SWSI PERCENTAGE OF
INTEREST TO COMMON STOCK TOTAL OUTSTANDING
BE TO BE RECEIVED SWSI SHARES AT
NAME OF BRADFORD CONTRIBUTED AT EFFECTIVE EFFECTIVE TIME
LIMITED PARTNER TO SWSI TIME
Allegheny 40.00% 859,478 6.00%
▇▇▇▇▇▇▇▇▇ 34.00% 730,556 5.10%
Glacial 25.00% 537,174 3.75%
5
SECTION 2.3 ISSUANCE OF NEW CERTIFICATES. At the Closing, SWSI shall issue
to each Superior Partner and Bradford Partner a certificate or certificates
representing the number of shares of SWSI Common Stock to be issued to such
Person pursuant to Section 2.2. Each such certificate shall be registered in the
name of the Person or Persons specified by the recipient thereof to SWSI in
writing at least two Business Days prior to the Closing.
SECTION 2.4 CERTIFICATE LEGENDS. The certificates evidencing the SWSI
Common Stock delivered pursuant to Section 2.3 shall bear a legend substantially
in the form set forth below and containing such other information as SWSI may
deem necessary or appropriate:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS OR PURSUANT
TO AN EXEMPTION THEREFROM WHICH, IN THE OPINION OF COUNSEL FOR THE HOLDER,
WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS
CORPORATION, IS AVAILABLE.
SECTION 2.5 FRACTIONAL SHARES. No fractional shares of SWSI Common Stock
or scrip shall be issued as a result of the transactions contemplated by Section
2.2. Instead of any fractional share of SWSI Common Stock which would otherwise
be issuable as a result of the such transactions, SWSI shall pay a cash
adjustment in respect of such fractional interest in a per share amount equal to
the initial public offering price of the SWSI Common Stock.
SECTION 2.6 CERTAIN ADJUSTMENTS. The Board may adjust the number of shares
of SWSI Common Stock to be received by each Superior Partner and each Bradford
Partner pursuant to Section 2.2 in order to reflect a capitalization of SWSI
that the Board reasonably determines to be in the best interests of SWSI and its
stockholders based on the actual pricing of the initial public offering of the
SWSI Common Stock; provided, however, that any such adjustment shall be made on
a pro rata basis in accordance with the relative percentages of total
outstanding shares of SWSI Common Stock contemplated by Section 2.2.
ARTICLE III
CLOSING
SECTION 3.1 TIME AND PLACE. The closing of the transactions contemplated
hereby (the "Closing") shall be held at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., Houston time, immediately
following the satisfaction or waiver of the conditions contained in Article IX
or at such other place or time as the parties hereto may mutually agree. The
date of the Closing is referred to herein as the "Closing Date."
SECTION 3.2 DELIVERIES AT CLOSING. Subject to the provisions of Article IX
hereof, at the Closing there shall be delivered the certificates and other
documents required to be delivered pursuant to Article IX hereof.
6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SUPERIOR PARTNERS
Each Superior Partner severally represents and warrants to SWSI and the
Bradford Partners with respect to itself and Superior Ltd. that the statements
contained in this Article IV are correct and complete as of the date hereof.
SECTION 4.1 ORGANIZATION AND QUALIFICATION OF SUPERIOR LTD. Superior Ltd.
is a limited partnership duly organized under the Pennsylvania LP Act and is
validly existing and in good standing under the laws of the State of
Pennsylvania. Superior Ltd. has all requisite limited partnership power and
authority to own, operate or lease its properties and to carry on its business
as now being conducted. Superior Ltd. is duly qualified to do business as a
foreign limited partnership and is in good standing in each jurisdiction where
the character of its properties owned, operated or leased, or the nature of its
activities, makes such qualifications necessary, except where the failure to be
so qualified and in good standing will not have a material adverse effect on the
business, operations, prospects, properties, assets, operating results or
condition (financial or otherwise) of Superior Ltd.
SECTION 4.2 CAPITALIZATION OF SUPERIOR LTD.
(a) Superior GP is the sole general partner of Superior Ltd. with a
1.0% general partner interest in Superior Ltd.; such general partner interest
has been duly authorized and validly issued in accordance with the Superior
Partnership Agreement and is owned by Superior GP free and clear of all Liens
(other than those arising under this Contribution Agreement and restrictions on
sales to the public of securities under applicable securities laws) and has no
outstanding agreement, understanding or obligation to sell, transfer or deliver
such general partner interest.
(b) Each Superior Limited Partner owns beneficially and of record
the limited partner interest in Superior Ltd. set forth opposite such Superior
Limited Partner's name in Section 2.2(c); such limited partner interest has been
duly authorized and validly issued in accordance with the Superior Partnership
Agreement and is fully paid (to the extent required under the Superior
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by the relevant provisions of the Pennsylvania LP Act); and such
Superior Limited Partner owns such limited partner interest free and clear of
all Liens (other than those arising under this Contribution Agreement and
restrictions on sales to the public of securities under applicable securities
laws) and has no outstanding agreement, understanding or obligation to sell,
transfer or deliver such limited partner interest.
(c) There are no outstanding subscriptions, options, calls,
contracts, commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any outstanding
security, instrument or other agreement obligating Superior Ltd. to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
partnership interests in Superior Ltd.
SECTION 4.3 AUTHORITY, AUTHORIZATION AND ENFORCEABILITY. Each Superior
Partner has the requisite power and authority (corporate or otherwise) and
capacity (in the case of an individual) to execute and deliver this Contribution
Agreement and each instrument
7
required hereby to be executed and delivered by it at the Closing, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of by Superior GP of
this Contribution Agreement and each instrument required hereby to be executed
and delivered by it at the Closing and the performance of its obligations
hereunder and thereunder have been duly and validly authorized by the board of
directors of Superior GP, and no other corporate proceedings of Superior GP are
necessary to authorize the execution and delivery of this Contribution Agreement
or the consummation of the transactions contemplated hereby. This Contribution
Agreement and each instrument required hereby have been duly executed and
delivered by each Superior Partner and (assuming due authorization, execution
and delivery hereof and thereof by the other parties hereto and thereto)
constitute the valid and legally binding obligations of each Superior Partner,
enforceable against each Superior Partner in accordance with their terms, except
that (A) such enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium or other laws, decisions or equitable principles now
or hereafter in effect relating to or affecting the enforcement of creditors'
rights or debtors' obligations generally, and to general equity principles, and
(B) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
SECTION 4.4 NO VIOLATION. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all permits and orders of Governmental Authorities
required in connection with the consummation of the transactions contemplated by
this Contribution Agreement, and the receipt of all approvals or consents
required to be obtained from third parties other than the Superior Partners or
the Bradford Partners (none of which the failure to obtain would, individually
or in the aggregate, have a material adverse effect on the ability of any
Superior Partner to consummate the transactions contemplated by this Agreement)
, neither the execution and delivery by the Superior Partners of this
Contribution Agreement or any instrument required hereby to be executed and
delivered by them at the Closing nor the performance by the Superior Partners of
their obligations hereunder or thereunder will (i) violate or breach the terms
of or cause a default under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination, cancellation or
acceleration of any obligation under, or result in the creation of any Lien upon
any of the properties or assets of Superior Ltd. or the partnership interests in
Superior Ltd. held by any Superior Partner under (A) any law, regulation or
order of any Governmental Authority applicable to Superior Ltd. or the Superior
Partners, (B) the Superior Partnership Agreement or the charter, bylaws or
similar organizational document of any Superior Partner, or (C) any contract,
agreement or other instrument or obligation to which Superior Ltd. or any
Superior Partner is a party or by which it or any of its properties or assets is
bound, or (ii) with the passage of time, the giving of notice or the taking of
any action by a third party, have any of the effects set forth in clause (i) of
this Section 4.4, except in any such case for any matters described in this
Section 4.4 that would not have an SWSI Material Adverse Effect.
SECTION 4.5 TITLE TO ASSETS. Superior Ltd. has good and indefeasible title
to all of its assets and properties, free and clear of all Liens, except for (i)
Permitted Liens or (ii) Liens arising in connection with any loan or credit
agreement to which Superior Ltd. or Bradford Ltd. is a party.
8
SECTION 4.6 LITIGATION. There are no suits, actions, proceedings or
investigations pending or threatened against Superior Ltd or such Superior
Partner (i) seeking to prevent or delay the Closing or (ii) that, individually
or in the aggregate, could reasonably be expected to have a material adverse
effect on Superior Ltd. or any Superior Partner's ability to perform its
obligations with respect to the transactions contemplated by this Agreement.
Superior Ltd. is not subject to any continuing court or administrative order,
writ, injunction or decree applicable to it or its assets. There are no
judgments against Superior Ltd.
SECTION 4.7 BANKRUPTCY. There are no bankruptcy, reorganization or
rearrangement proceedings under any bankruptcy, insolvency, reorganization,
moratorium or other similar laws with respect to creditors pending against,
being contemplated by, or to the knowledge of any Superior Partner, threatened
against Superior Ltd. or any Superior Partner.
SECTION 4.8 BROKERAGE FEES AND COMMISSIONS. No Superior Partner has,
directly or indirectly, incurred any obligation or entered into any agreement
for any investment banking, brokerage or finder's fee or commission in
connection with this Contribution Agreement for which any Bradford Partner shall
incur any liability.
SECTION 4.9 NO DISTRIBUTION. Each Superior Partner is an experienced and
knowledgeable investor in the oilfield services industry, is able to bear the
economic risks of its acquisition and ownership of the SWSI Common Stock and is
capable of evaluating (and has evaluated) the merits and risks of SWSI and the
acquisition and ownership of the SWSI Common Stock. Prior to entering into this
Contribution Agreement, each Superior Partner had the opportunity to obtain the
advice of Persons, such as legal and tax advisors, that it deemed appropriate
concerning the transactions contemplated by this Contribution Agreement. Each
Superior Partner is an "accredited investor," as such term is defined in
Regulation D of the Securities Act of 1933, as amended, and will acquire the
SWSI Common Stock for its own account and not with a view to a sale or
distribution thereof in violation of the Securities Act of 1933, as amended, and
the rules and regulations thereunder, any applicable state blue sky laws or any
other applicable securities laws.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BRADFORD PARTNERS
Each Bradford Partner severally represents and warrants to SWSI and the
Superior Partners with respect to itself and Bradford Ltd. that the statements
contained in this Article V are correct and complete as of the date hereof.
SECTION 5.1 ORGANIZATION AND QUALIFICATION OF BRADFORD LTD. Bradford Ltd.
is a limited partnership duly organized under the Pennsylvania LP Act and is
validly existing and in good standing under the laws of the State of
Pennsylvania. Bradford Ltd. has all requisite limited partnership power and
authority to own, operate or lease its properties and to carry on its business
as now being conducted. Bradford Ltd. is duly qualified to do business as a
foreign limited partnership and is in good standing in each jurisdiction where
the character of its properties owned, operated or leased, or the nature of its
activities, makes such qualifications necessary, except where the failure to be
so qualified and in good standing will not have a
9
material adverse effect on the business, operations, prospects, properties,
assets, operating results or condition (financial or otherwise) of Bradford Ltd.
SECTION 5.2 CAPITALIZATION OF BRADFORD LTD.
(a) ▇▇▇▇▇▇▇▇ ▇▇ is the sole general partner of Bradford Ltd. with a
1.0% general partner interest in Bradford Ltd.; such general partner interest
has been duly authorized and validly issued in accordance with the Bradford
Partnership Agreement and is owned by ▇▇▇▇▇▇▇▇ ▇▇ free and clear of all Liens
(other than those arising under this Contribution Agreement and restrictions on
sales to the public of securities under applicable securities laws) and has no
outstanding agreement, understanding or obligation to sell, transfer or deliver
such general partner interest.
(b) Each Bradford Limited Partner owns beneficially and of record
the limited partner interest in Bradford Ltd. set forth opposite such Bradford
Limited Partner's name in Section 2.2(c); such limited partner interest has been
duly authorized and validly issued in accordance with the Bradford Partnership
Agreement and is fully paid (to the extent required under the Bradford
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by the relevant provisions of the Pennsylvania LP Act); and such
Bradford Limited Partner owns such limited partner interest free and clear of
all Liens (other than those arising under this Contribution Agreement and
restrictions on sales to the public of securities under applicable securities
laws) and has no outstanding agreement, understanding or obligation to sell,
transfer or deliver such limited partner interest.
(c) There are no outstanding subscriptions, options, calls,
contracts, commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any outstanding
security, instrument or other agreement obligating Bradford Ltd. to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
partnership interests in Bradford Ltd.
SECTION 5.3 AUTHORITY, AUTHORIZATION AND ENFORCEABILITY. Each Bradford
Partner has all requisite corporate power and authority to execute and deliver
this Contribution Agreement and each instrument required hereby to be executed
and delivered by it at the Closing, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of by each Bradford Partner of this Contribution
Agreement and each instrument required hereby to be executed and delivered by it
at the Closing and the performance of its obligations hereunder and thereunder
have been duly and validly authorized by the board of directors of such Bradford
Partner, and no other corporate proceedings of such Bradford Partner are
necessary to authorize the execution and delivery of this Contribution Agreement
or the consummation of the transactions contemplated hereby. This Contribution
Agreement and each instrument required hereby have been duly executed and
delivered by each Bradford Partner and (assuming due authorization, execution
and delivery hereof and thereof by the other parties hereto and thereto)
constitute the valid and legally binding obligations of each Bradford Partner,
enforceable against each Bradford Partner in accordance with their terms, except
that (A) such enforceability may be subject to bankruptcy, insolvency,
reorganization, moratorium or other laws, decisions or equitable principles now
or hereafter in effect relating to or affecting the enforcement of creditors'
rights or debtors'
10
obligations generally, and to general equity principles, and (B) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
SECTION 5.4 NO VIOLATION. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all permits and orders of Governmental Authorities
required in connection with the consummation of the transactions contemplated by
this Contribution Agreement, and the receipt of all approvals or consents
required to be obtained from third parties other than the Superior Partners or
the Bradford Partners (none of which the failure to obtain would, individually
or in the aggregate, have a material adverse effect on the ability of any
Bradford Partner to consummate the transactions contemplated by this Agreement),
neither the execution and delivery by the Bradford Partners of this Contribution
Agreement or any instrument required hereby to be executed and delivered by it
at the Closing nor the performance by the Bradford Partners of its obligations
hereunder or thereunder will (i) violate or breach the terms of or cause a
default under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination, cancellation or acceleration
of any obligation under, or result in the creation of any Lien upon any of the
properties or assets of Bradford Ltd. or the partnership interests of Bradford
Ltd. held by any Bradford Partner under (A) any law, regulation or order of any
Governmental Authority applicable to Bradford Ltd. or any Bradford Partner, (B)
the Bradford Partnership Agreement or the charter, bylaws or similar
organizational document of any Bradford Partner or (C) any contract, agreement
or other instrument or obligation to which Bradford Ltd. or any Bradford Partner
is a party or by which it or any of its properties or assets is bound, or (ii)
with the passage of time, the giving of notice or the taking of any action by a
third party, have any of the effects set forth in clause (i) of this Section
5.4, except in any such case for any matters described in this Section 5.4 that
would not have an SWSI Material Adverse Effect.
SECTION 5.5 TITLE TO ASSETS. Bradford Ltd. has good and indefeasible title
to all of its assets and properties, free and clear of all Liens, except for (i)
Permitted Liens or (ii) Liens arising in connection with any loan or credit
agreement to which Bradford Ltd. or Superior Ltd. is a party.
SECTION 5.6 LITIGATION. There are no suits, actions, proceedings or
investigations pending or threatened against Bradford Ltd or any Bradford
Partner (i) seeking to prevent or delay the Closing or (ii) that, individually
or in the aggregate, could reasonably be expected to have a material adverse
effect on Bradford Ltd. or any Bradford Partner's ability to perform its
obligations with respect to the transactions contemplated by this Agreement.
Bradford Ltd. is not subject to any continuing court or administrative order,
writ, injunction or decree applicable to it or its assets. There are no
judgments against Bradford Ltd.
SECTION 5.7 BANKRUPTCY. There are no bankruptcy, reorganization or
rearrangement proceedings under any bankruptcy, insolvency, reorganization,
moratorium or other similar laws with respect to creditors pending against,
being contemplated by, or to the knowledge of any Bradford Partner, threatened
against Bradford Ltd. or any Bradford Partner.
SECTION 5.8 BROKERAGE FEES AND COMMISSIONS. No Bradford Partner has,
directly or indirectly, incurred any obligation or entered into any agreement
for any investment
11
banking, brokerage or finder's fee or commission in connection with this
Contribution Agreement for which any Superior Partner shall incur any liability.
SECTION 5.9 NO DISTRIBUTION. Each Bradford Partner is an experienced and
knowledgeable investor in the oilfield services industry, is able to bear the
economic risks of its acquisition and ownership of the SWSI Common Stock and is
capable of evaluating (and has evaluated) the merits and risks of SWSI and the
acquisition and ownership of the SWSI Common Stock. Prior to entering into this
Contribution Agreement, each Bradford Partner had the opportunity to obtain the
advice of Persons, such as legal and tax advisors, that it deemed appropriate
concerning the transactions contemplated by this Contribution Agreement. Each
Bradford Partner is an "accredited investor," as such term is defined in
Regulation D of the Securities Act of 1933, as amended, and will acquire the
SWSI Common Stock for its own account and not with a view to a sale or
distribution thereof in violation of the Securities Act of 1933, as amended, and
the rules and regulations thereunder, any applicable state blue sky laws or any
other applicable securities laws.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SWSI
SWSI represents and warrants to the other parties to this Contribution
Agreement that the statements contained in this Article VI are correct and
complete as of the date hereof.
SECTION 6.1 ORGANIZATION OF SWSI. SWSI is a corporation duly organized
under the DGCL and is validly existing and in good standing under the laws of
the State of Delaware. SWSI is a recently formed corporation and has no assets,
liabilities, business or operations.
SECTION 6.2 CAPITALIZATION. The authorized capital stock of SWSI consists
of 1,000 shares of SWSI Common Stock, of which 1,000 shares are issued and
outstanding. All of the outstanding shares of SWSI Common Stock are duly
authorized, validly issued, fully paid, nonassessable, and were not issued in
violation of the preemptive rights of any person. Except with respect to the
SWSI Initial Public Offering, there are no outstanding subscriptions, options,
calls, contracts, commitments, understandings, restrictions, arrangements,
rights or warrants, including any right of conversion or exchange under any
outstanding security, instrument or other agreement obligating SWSI or any
subsidiary of SWSI to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of the capital stock of SWSI or any subsidiary of
SWSI or obligating SWSI or any subsidiary of SWSI to grant, extend or enter into
any such agreement or commitment.
SECTION 6.3 AUTHORITY, AUTHORIZATION AND ENFORCEABILITY. SWSI has all
requisite corporate power and authority to execute and deliver this Contribution
Agreement and each instrument required hereby to be executed and delivered by it
at the Closing, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by SWSI of this Contribution Agreement and each instrument required
hereby to be executed and delivered by it at the Closing and the performance of
its obligations hereunder and thereunder have been duly and validly authorized
by the Board, and no other corporate proceedings of SWSI are necessary to
authorize the execution and delivery of this Contribution Agreement or the
consummation of the transactions contemplated
12
hereby. This Contribution Agreement and each instrument required hereby have
been duly executed and delivered by SWSI and (assuming due authorization,
execution and delivery hereof and thereof by the other parties hereto and
thereto) constitute the valid and legally binding obligations of SWSI,
enforceable against SWSI in accordance with their terms, except that (A) such
enforceability may be subject to bankruptcy, insolvency, reorganization,
moratorium or other laws, decisions or equitable principles now or hereafter in
effect relating to or affecting the enforcement of creditors' rights or debtors'
obligations generally, and to general equity principles, and (B) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
SECTION 6.4 NO VIOLATION. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all permits and orders of, Governmental Authorities
required in connection with the consummation of the transactions contemplated by
this Contribution Agreement, neither the execution and delivery by SWSI of this
Contribution Agreement or any instrument required hereby to be executed and
delivered by it at the Closing nor the performance by SWSI of its obligations
hereunder or thereunder will (i) violate or breach the terms of or cause a
default under (A) any law, regulation or order of any Governmental Authority
applicable to SWSI or (B) SWSI's certificate of incorporation and bylaws or (ii)
with the passage of time, the giving of notice or the taking of any action by a
third party, have any of the effects set forth in clause (i) of this Section
6.4, except in any such case for any matters described in this Section 6.4 that
would not have an SWSI Material Adverse Effect.
SECTION 6.5 LITIGATION. There are no suits, actions, proceedings or
investigations pending or threatened against SWSI (i) seeking to prevent or
delay the Closing or (ii) that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on SWSI's ability to
perform its obligations with respect to the transactions contemplated by this
Agreement. SWSI is not subject to any continuing court or administrative order,
writ, injunction or decree applicable to it. There are no judgments against
SWSI.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES CONCERNING NEW GP
Each of Superior GP and ▇▇▇▇▇▇▇▇ ▇▇ represents and warrants to the other
parties hereto that the statements contained in this Article VII are correct and
complete as of the date hereof.
SECTION 7.1 ORGANIZATION OF NEW GP. New GP is a limited liability company
duly organized under the DLLCA and is validly existing and in good standing
under the laws of the State of Delaware. New GP is a recently formed limited
liability company and has no assets, liabilities, business or operations.
SECTION 7.2 CAPITALIZATION OF NEW GP(a) . Superior GP owns beneficially
and of record an 85% limited liability company interest in New GP. ▇▇▇▇▇▇▇▇ ▇▇
owns beneficially and of record a 15% limited liability company interest in New
GP. Each such limited liability company interest has been duly authorized and
validly issued in accordance with the New GP LLC Agreement, is fully paid (to
the extent required under the New GP LLC Agreement) and
13
nonassessable (except as such nonassessability may be affected by Section 18-607
of the Delaware LLC Act) and is owned free and clear of all Liens (other than
those arising under this Contribution Agreement and restrictions on sales to the
public of securities under applicable securities laws). There are no outstanding
subscriptions, options, calls, contracts, commitments, understandings,
restrictions, arrangements, rights or warrants, including any right of
conversion or exchange under any outstanding security, instrument or other
agreement obligating New GP to issue, deliver or sell, or cause to be issued,
delivered or sold, additional limited liability company interests in New GP.
ARTICLE VIII
COVENANTS
SECTION 8.1 ORDINARY COURSE OF BUSINESS. Between the date of this
Contribution Agreement and the earlier to occur of the Effective Time or the
termination of this Contribution Agreement, the Superior Partners and the
Bradford Partners will cause Superior Ltd. and Bradford Ltd., as applicable, to
carry on their respective businesses diligently and in the ordinary and usual
course and consistent with past practice, and, without limiting the generality
of the foregoing, and the Superior Partners and the Bradford Partners will use
commercially reasonable efforts to preserve the respective business
organizations of Superior Ltd. and Bradford Ltd. intact, keep available the
services of their respective present executive officers and employees and
preserve their respective present relationships with persons having business
dealings with it.
SECTION 8.2 RESTRICTED ACTIVITIES AND TRANSACTIONS. Except as otherwise
contemplated herein or in connection with the SWSI Initial Public Offering or as
otherwise consented to in writing by the holders of the percentages of limited
partner interests of Superior Ltd. and Bradford Ltd. set forth in Section
10.1(d), between the date of this Contribution Agreement and the earlier to
occur of the Effective Time or the termination of this Contribution Agreement,
(i) neither the Superior Partners nor the Bradford Partners shall sell, transfer
or otherwise deliver their respective partnership interests and (ii) SWSI will
not and neither the Superior Partners nor the Bradford Partners will cause
Superior Ltd., Bradford Ltd. or New GP to:
(a) issue or commit to issue any of its capital stock or other
ownership or equity interests;
(b) grant or commit to grant any options, warrants, convertible
securities or other rights to subscribe for, purchase or otherwise acquire
any shares of its capital stock or other ownership or equity interests;
(c) declare, set aside, or pay any dividend or distribution or make
any other payment with respect to its capital stock or other ownership
interests except in the ordinary and usual course and consistent with past
practice;
(d) directly or indirectly redeem, purchase or otherwise acquire or
commit to acquire any of its capital stock or other ownership or equity
interests;
(e) effect a split or reclassification of any of its capital stock
or a recapitalization or other reorganization;
14
(f) amend or otherwise alter its articles of incorporation, bylaws,
limited liability agreement or limited partnership agreement or other
governing instruments;
(g) enter into or make any change in any of its employee benefit
plans or grant any increase in compensation (other than increases in
compensation in the ordinary course of business for field and office
personnel who are not managers or executives), or provide any special
severance arrangement involving any of its employees, officers or
directors;
(h) acquire control or ownership in any other corporation,
association, joint venture, partnership, business trust or other business
entity, or acquire control or ownership of all or a substantial portion of
the assets of any of the foregoing for a purchase price (including any
assumed liabilities) in excess of $5,000,000;
(i) except in the ordinary course of business or as otherwise
permitted under this Contribution Agreement and except for budgeted
capital expenditures, enter into or agree to enter into any agreement or
transaction involving the incurrence of an obligation to pay an amount in
excess of an aggregate of $2,000,000;
(j) create, assume or permit to exist any Lien on any of its assets,
tangible or intangible, except (i) as permitted under its existing credit
facilities with banks and any renewals, modifications or rearrangements
thereof on terms and conditions not materially less favorable to the
respective borrower or (ii) in the ordinary course of business consistent
with past practice;
(k) except as in the ordinary and usual course of business and
consistent with past practice or as otherwise contemplated or permitted
herein, (i) borrow, or agree to borrow any funds or voluntarily incur,
assume or become subject to, whether directly or by way of guaranty or
otherwise, any obligation or liability (absolute or contingent) in excess
of $5,000,000, except as permitted under its existing credit facilities
and in connection with any renewal, modification or rearrangement thereof
which is on terms and conditions not materially less favorable to the
respective borrower and which does not provide for an increase in the
maximum borrowing amount, (ii) cancel or agree to cancel any debts or
claims, (iii) lease, sublease, sell or transfer, agree to sublease, sell
or transfer, or grant or agree to grant any preferential rights to lease
or acquire, any of its assets, property or rights having a fair market
value in excess of $2,000,000 or (iv) make or permit any material
amendment or termination of any material contract, agreement, license or
other right to which it is a party;
(l) settle any threatened or pending litigation that is not fully
covered by insurance other than for immaterial consideration or for an
amount less than that reserved as of the date hereof for such litigation
on its books and records; or
(m) commit itself to do any of the foregoing.
SECTION 8.3 HSR AND OTHER REGULATORY MATTERS. Each of the parties hereto
agrees to make all necessary filings on a timely basis with respect to the HSR
Act, and other applicable laws and will use its commercially reasonable efforts
to obtain any other regulatory
15
approvals which may be required to consummate the transactions contemplated
herein. Notwithstanding anything in this Contribution Agreement to the contrary,
if any party hereto or any Affiliate thereof is required to make a filing under
any such acts in connection with the transactions contemplated by this
Contribution Agreement, the filing fees of such Person shall be borne by the
party whose equity ownership gave rise to such filing obligation.
SECTION 8.4 COMMERCIALLY REASONABLE EFFORTS. Upon the terms and subject to
the conditions hereof, each of the parties hereto agrees to use its commercially
reasonable efforts to take, or cause to be taken, all appropriate action, and to
do or cause to be done, all things necessary, proper or advisable to consummate
and make effective the transactions as contemplated by this Contribution
Agreement and to cooperate in connection with the foregoing, including
commercially reasonable efforts:
(a) to obtain any necessary waivers, consents and approvals from
other parties to material notes, licenses, agreements and other
instruments and obligations;
(b) to obtain any material consents, approvals, authorizations and
permits required to be obtained under any federal, state or local statute,
rule or regulation;
(c) to defend all lawsuits or other legal proceedings challenging
this Contribution Agreement or the consummation of the transactions as
contemplated hereby; and
(d) to effect promptly all necessary filings and notifications
including, but not limited to, filings under the HSR Act, and prompt
submissions of information requested by Governmental Authorities.
SECTION 8.5 NEW SWSI CHARTER AND BYLAWS. At least one Business Day prior
to the Effective Time, SWSI will file the New SWSI Charter with the Secretary of
State of the State of Delaware and the Board will adopt the New SWSI Bylaws.
SECTION 8.6 OFFICERS AND DIRECTORS. The duly elected officers and
directors of SWSI who hold office immediately prior to the Effective Time shall
be the officers and directors of SWSI and shall thereafter continue to hold such
positions until their successors have been duly elected.
SECTION 8.7 ACCESS TO INFORMATION. From the date hereof to the Effective
Time, each of the parties hereto shall afford the officers, employees and
representatives of the others, complete access at all reasonable times to its
respective officers, employees, agents, properties, books and records, as
applicable, and shall furnish the others all financial, operating and other data
and information as the others, through their officers, employees or
representatives, may reasonably request.
SECTION 8.8 SECTION 351 REPORTING. For United States federal income tax
purposes and any applicable state or local income tax purposes, the parties
hereto recognize that (i) the contributions described in Sections 2.1 and 2.2
will be treated to the Superior Partners and the Bradford Partners as
contributions by the Superior Partners and the Bradford Partners of partnership
interests in Superior Ltd. and Bradford Ltd. to SWSI in exchange for shares of
SWSI
16
Common Stock to which Section 351 of the Code applies and (ii) following
such contributions, each of New GP, Superior Ltd. and Bradford Ltd. will be
treated as an entity disregarded as separate from its owner, SWSI. No party
shall file any income tax return or otherwise take any position for income tax
purposes that is inconsistent with such treatment unless required to do so
pursuant to a "determination" within the meaning of Section 1313(a) of the Code
or the corresponding provision of state or local income tax law.
SECTION 8.9 SWSI REGISTRATION STATEMENT. Each of the parties hereto shall
cooperate in the preparation and filing of the SWSI Registration Statement and
to consummate the SWSI Initial Public Offering. As promptly as is practicable
following the execution of this Contribution Agreement, the Superior Partners
and the Bradford Partners shall cooperate with SWSI to cause such SWSI
Registration Statement to be filed with the Commission under and pursuant to the
provisions of the Securities Act for the purpose of registering SWSI Common
Stock for sale to the public in the SWSI Initial Public Offering.
SECTION 8.10 BLUE SKY. SWSI will use commercially reasonable efforts to
obtain prior to the Effective Time all necessary Blue Sky permits and approvals
required to permit the issuance of SWSI Common Stock in accordance with the
provisions of this Contribution Agreement.
SECTION 8.11 NOTIFICATION OF CERTAIN MATTERS. Each party hereto will give
prompt notice of (i) the occurrence or non-occurrence of any event, the
occurrence or nonoccurrence of which would be likely to cause any representation
or warranty of such Person contained herein to be untrue or inaccurate in any
material respect at or prior to the Effective Time, (ii) any material failure of
any such Person to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by such Person hereunder and (iii) any material
adverse change in the business, operations, operating results or condition
(financial or otherwise) of such party. The delivery or deemed delivery of any
notice pursuant to this Section 8.11 shall not be deemed to (i) modify the
representations or warranties hereunder of the party delivering such notice,
(ii) modify the conditions set forth in Article IX, or (iii) limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
SECTION 8.12 FURTHER ASSURANCES. The parties hereto agree to execute and
deliver, or cause to be executed and delivered, such further instruments or
documents or take such other action as may be reasonably necessary or convenient
to carry out the transactions contemplated hereby.
ARTICLE IX
CONDITIONS
SECTION 9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. Notwithstanding any
other provision of this Agreement, the respective obligations of each party to
effect the transactions contemplated by this Contribution Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
17
(a) the waiting period (and any extension thereof) applicable to the
consummation of the transactions contemplated herein under the HSR Act
shall have expired or been terminated;
(b) no order shall have been entered and remained in effect in any
action or proceeding before any federal, foreign, state or provincial
court or governmental agency or other federal, foreign, state or
provincial regulatory or administrative agency or commission that would
prevent or make illegal the consummation of the transactions contemplated
herein;
(c) the SWSI Registration Statement shall be effective on the
Closing Date and all post-effective amendments filed shall have been
declared effective or shall have been withdrawn, and no stop order
suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the
knowledge of the parties, threatened by the Commission;
(d) SWSI and the underwriters named in the SWSI Registration
Statement shall have executed an underwriting agreement for a firm
commitment underwriting as described in the SWSI Registration Statement
(the "Underwriting Agreement");
(e) all other approvals of Governmental Authorities and of
non-governmental persons or entities shall have been obtained (i) the
granting of which is necessary for the consummation of the transactions
contemplated herein and (ii) the non-receipt of which will have an SWSI
Material Adverse Effect;
(f) the representations and warranties of the parties hereto
contained in this Contribution Agreement shall have been true and correct
as of the date of execution of this Contribution Agreement, except for
such failures to be true which (i) have been cured prior to the Closing
Date or (ii) do not, in the aggregate, constitute an SWSI Material Adverse
Effect;
(g) the agreements and covenants of the parties hereto to be
complied with or performed on or before the Closing Date pursuant to the
terms hereof shall have been duly complied with or performed, except for
such failures to comply or perform which do not, in the aggregate,
constitute an SWSI Material Adverse Effect;
(h) no SWSI Material Adverse Effect shall have occurred since the
date of this Agreement;
(i) assignment agreements in form and substance reasonably
acceptable to the parties hereto evidencing the transfers of partnership
interests and limited liability company interests contemplated by Article
II shall have been executed by the parties thereto;
(j) each of the Superior Partners shall have waived all applicable
restrictions and purchase options with respect to the transfer of their
respective partnership interests in Superior Ltd. contained in the
Superior Partnership Agreement, including Exhibit A and Exhibit B thereto;
18
(k) each of the Bradford Partners shall have waived all applicable
restrictions and purchase options with respect to the transfer of their
respective partnership interests in Bradford Ltd. contained in the
Bradford Partnership Agreement, including Exhibit A thereto;
(l) each of the Superior Partners and the Bradford Partners shall
have withdrawn as partners from Superior Ltd. and Bradford Ltd.,
respectively, in accordance with the Superior Partnership Agreement and
the Bradford Partnership Agreement, respectively, and the Pennsylvania LP
Act;
(m) each of Superior GP and ▇▇▇▇▇▇▇▇ ▇▇ shall have withdrawn as
members of New GP in accordance with the New GP LLC Agreement and the
Delaware LLC Act; and
(n) each of the Superior Partners and the Bradford Partners shall
have executed and delivered the Registration Rights Agreement.
ARTICLE X
TERMINATION
SECTION 10.1 TERMINATION. This Contribution Agreement may be terminated
and the transactions contemplated herein may be abandoned at any time prior to
the Effective Time:
(a) by any party hereto in the event of an SWSI Material Adverse
Effect that is incapable of being cured, remedied or reversed within 90
days of such event, provided that such party or its operations are not
responsible for the occurrence of such SWSI Material Adverse Effect;
(b) by any party hereto if the Effective Time shall not have
occurred on or before November 1, 2005 (unless the Effective Time has not
occurred as the result of a breach of the terms hereof by the party
desiring to exercise the termination right, which date may be extended by
mutual agreement of the parties hereto);
(c) by any party hereto if a final unappealable order to restrain,
enjoin or otherwise prevent, or awarding substantial damages in connection
with, consummation of this Contribution Agreement or the transactions
contemplated in connection herewith shall have been entered;
(d) with the consent of (i) the Superior Partners holding at least
60% of the limited partner interests of Superior Ltd. and (ii) the
Bradford Partners holding at least 50% of the limited partner interests of
Bradford Ltd.
SECTION 10.2 EFFECT OF TERMINATION. In the event of any termination of
this Contribution Agreement pursuant to Section 10.1, the parties hereto shall
have no obligation or liability to any other party hereto except the provisions
of this Section and Sections 10.3, 11.5, 11.6, 11.8, 11.9 and 11.10 hereof shall
survive any such termination and, except as provided in this Section 10.2, all
documents executed in connection with this Contribution Agreement shall be null
and void.
19
SECTION 10.3 FEES AND EXPENSES. The aggregate costs and expenses incurred
by all parties hereto in connection with this Contribution Agreement and the
transactions contemplated herein shall be paid or reimbursed, as the case may
be, 85% by the Superior Partners, pro rata in accordance with their respective
percentage interests in Superior Ltd., and 15% by the Bradford Partners, pro
rata in accordance with their respective percentage interests in Bradford Ltd.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 WAIVER AND AMENDMENT. Any provision of this Contribution
Agreement may be waived at any time by the party that is entitled to the
benefits thereof. This Contribution Agreement may not be amended or supplemented
at any time, except by an instrument in writing signed on behalf of each party
hereto.
SECTION 11.2 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. No
representation and warranty made in this Contribution Agreement shall survive
the Effective Time. This Section 11.2 shall not limit the term of any covenant
or agreement which by its terms contemplates performance after the Effective
Time.
SECTION 11.3 ASSIGNMENT. This Contribution Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs, devisees and assigns. Except as
set forth in this Contribution Agreement, this Contribution Agreement shall not
be assignable until after the Closing Date (except by inheritance or devise) by
the parties hereto, except with the prior written consent of the other parties.
SECTION 11.4 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered if delivered in person, by cable, telegram, telex, or
telecopy and shall be deemed to have been duly given three business days after
deposit with a United States post office if delivered by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties as
follows:
if to SWSI:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇
One Glade Park East
P.O. Box 1022
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
20
and a copy to:
T. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
2300 First City Tower
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
if to the Superior Partners:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇
One Glade Park East
P.O. Box 1022
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
if to the Bradford Partners:
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇
One Glade Park East
P.O. Box 1022
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
SECTION 11.5 GOVERNING LAW. This Contribution Agreement shall be governed
by and construed in accordance with the substantive law of the Commonwealth of
Pennsylvania without giving effect to the principles of conflicts of law
thereof.
21
SECTION 11.6 SEVERABILITY. If any term or other provisions of this
Contribution Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of this
Contribution Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner material to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Contribution Agreement so as to effect the original intent of the parties as
closely as possible.
SECTION 11.7 COUNTERPARTS. This Contribution Agreement may be executed in
counterparts, each of which shall be an original document, but all of which
together shall constitute one and the same agreement.
SECTION 11.8 HEADINGS. The Section headings herein are for convenience
only and are not intended to be part of or to affect the meaning or
interpretation of the Agreement.
SECTION 11.9 ENFORCEMENT OF THE AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Contribution Agreement were not performed in accordance with their specific
terms or otherwise breached. It is accordingly agreed that the parties hereto
shall be entitled to any injunction or injunctions to prevent breaches of this
Contribution Agreement and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedies to which they are entitled
at law or in equity. In addition, each of the parties hereto consents to submit
itself to the personal jurisdiction of any federal or state court sitting in the
Commonwealth of Pennsylvania in the event any dispute arises out of this
Contribution Agreement and agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court.
SECTION 11.10 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This
Contribution Agreement, including the documents and information supplied in
writing, and instruments referred to herein, constitute the entire agreement and
supersedes all other prior agreements, and understandings, both oral and
written, among the parties or any of them, with respect to the subject matter
hereof. This Contribution Agreement shall be binding upon and inure solely to
the benefit of the parties hereto, and nothing in this Contribution Agreement,
including the documents and information supplied in writing, and instruments
referred to herein, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Contribution Agreement.
SECTION 11.11 CERTAIN ASSIGNMENTS. Each of the parties hereto acknowledge
and agree that each Superior Partner and each Bradford Partner may transfer and
assign their respective shares, or their right to receive such shares, of SWSI
Common Stock to be received pursuant to Section 2.2 to an Affiliate or an
immediate family member of such Superior Partner or Bradford Partner; provided,
however, that (i) any such transfer shall be by way of a gift or other transfer
for no consideration for estate planning, tax planning or similar purposes and
(ii) each transferee pursuant to this Section 11.11 shall in connection with
such transfer agree to be bound by, and shall become a party to, this Agreement.
22
[signature pages follow]
23
IN WITNESS WHEREOF, the parties to this Contribution Agreement have caused
it to be duly executed as of the date first above written.
SWSI:
Superior Well Services, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________
Title: Chief Executive Officer
_________________________________
SUPERIOR PARTNERS:
Buffalo Valley Real Estate Company
By: /s/ ▇.▇. ▇▇▇▇▇▇
________________________________
Name: ▇.▇. ▇▇▇▇▇▇
_________________________________
Title: President
_________________________________
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇, ▇▇. Grantor Retained Annuity
Trust Dated November 1, 2004
By: /s/ ▇.▇. ▇▇▇▇▇▇
________________________________
Name: ▇.▇. ▇▇▇▇▇▇
_________________________________
Title: Trustee
_________________________________
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
24
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ Rhys ▇. ▇▇▇▇▇
__________________________________________
Rhys ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ PARTNERS:
Eastern Material Corp.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Allegheny Mineral Corp.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇ Cement & Supply Corp.
By: /s/ ▇. ▇. ▇▇▇▇▇▇, ▇▇.
________________________________
Name: ▇. ▇. ▇▇▇▇▇▇, ▇▇.
Title: President
Glacial Sand & Gravel Co.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
25